Salary History Bans: What Employers Need to Know

If you’re a hiring manager or work in human resources, you need to understand what salary history bans are and what that means for your hiring process. Until recently, employers during the hiring process in all states could ask applicants about their current salaries or what they made at previous jobs. Now with a renewed national focus on gender inequality in pay, many local and state governments are enacting new laws that prohibit employers from requesting salary information from job applicants.

There are only a handful of states and cities have passed such laws. However, employers should be aware that more laws could be on the horizon and be mindful of equal pay laws when negotiating an applicant’s salary. In this guide, we’re going to walk through what employers need to know about salary history bans, a list of states and cities with current bans in place, and more. So let’s get started.

What’s the Reasoning Behind Salary History Bans?

Salary history bans are designed to address gender pay inequality. We know that it has long been illegal for employers to pay different wages to men and women for the same work. However, a significant pay gap still exists. According to a report from the Bureau of Labor Statistics, women earned 82% of what men earned in 2016. For minority women, the pay gap is generally even more pronounced. The salary history ban is designed to put a stop to that.

What Does a Salary History Ban Prohibit?

A salary history ban prohibits employers from asking applicants about their current or past salaries or benefits. They generally also prohibit employers from seeking this information through an agent or from sources other than the applicant, such as the applicant’s former employers. Here’s a more detailed list of questions or statements the salary history ban prohibits:

The term generally refers to the communication of any question or statement to an applicant

Or an applicant’s current or former employer

Or a current or former employee

Or an agent of the applicant’s current or former employer (in writing or otherwise) for the purpose of obtaining an applicant’s salary history

Or search publicly available records or reports for the purpose of obtaining an applicant’s current or former compensation data

Employers in states with salary history bans can still ask applicants about their salary requirements or expectations for the job. So employers will still be able to identify and quickly weed out applicants with unrealistic expectations or whom they can’t afford to hire. Should an applicant offer up salary information voluntarily without being asked, the employer can consider that information in setting pay.

List of Existing Salary History Bans

As of February 2019, there are 13 statewide bans and 10 local bans on salary history.

What Should Employers Do Today?

If your company is subject to any of these laws, the first thing to do is remove questions on print and online applications that request compensation history. But the more difficult shift will be training for managers. This also opens your company up to more risk. The human resources team at your company needs to train these individuals as quickly as possible.

These managers will no longer be able to ask any questions about previous pay, including commissions and, in some cases, benefits. Instead, more generic questions about employees’ earning expectations will need to be asked. Employers will have to ensure that outside recruiters do the same. Many employers we work with have created a salary range for each position and ensure that the variations within those ranges are based on things like merit, education and experience.

Here’s a quick checklist of items you should take care of regarding salary history bans to remain in compliance:

Review existing recruiting and onboarding policies, practices and procedures to ensure compliance with the specific provisions and prohibitions set forth in these FAQs

Review all existing job applications to ensure those documents do not contain any requests for applicants to disclose their salary histories during the hiring process

Provide FAQs to recruiters and other personnel involved in interviewing and onboarding to ensure they are not asking (or otherwise prompting) candidates to disclose salary history

Recruiters should be trained to focus on an applicant’s salary requirements and expectations versus salary history, emphasizing the company sets pay commensurate with experience

Refrain from any conduct which could be construed as a refusal to hire an applicant based upon his or her failure to provide salary history

Whether or not your jurisdiction is covered by the new laws, the trend seems to be taking hold. Similar measures are under consideration in a number of jurisdictions, and it may only be a matter of time before your state or community joins this growing list.

At Barada Associates, we have 40 years of experience ensuring employers remain compliant will all kinds of hiring regulations, including salary history bans. Request a call with one of our trained experts today.